Hopefully, Judge Senter will tell the Farm boys the game is over and the party is about to start – or, as Sop might be inclined to say, they can put the BFR&G fee agreement (Exhibit 5) where the sun doesn’t shine.

Along with the so-called Response are nine exhibits: three sets of photographs of the McIntosh home (Exhibits 1, 2, and 3); copies of the checks issued the McIntoshes for flood damage (Exhibit 4); the go-ahead-Farm-boys-and-show-your-ass Exhibit 5; aging depositions of Wyatt, Ford, Ford, and Kelly (Exhibits 6 – 9) – and, then, there’s the game plan – the Memorandum. (exhibits are posted in Rigsby qui tam legal on left sidebar)

Dr Ed Duett of Mississippi State has all the finest insurance crooks coming to speak at MSU’s annual insurance day set for April 23, 2009. Our readers may recall he brought in Rossie for I day 2008. This year’s list of crooks and charlatans is very impressive and includes a record number of participants with ties to companies under current federal investigation and/or hogs at the taxpayer TARP trough. The complete speaker list is here but I thought I’d summarize the various sessions for our reader’s convenience:

In fact, our investigation suggests that by the time AIG had entered the CDS fray in a serious way more than five years ago, the firm was already doomed. No longer able to prop up its earnings using reinsurance because of growing scrutiny from state insurance regulators and federal law enforcement agencies, AIG’s foray into CDS was really the grand finale. AIG was a Ponzi scheme plain and simple, yet the Obama Administration still thinks of AIG as a real company that simply took excessive risks. No, to us what the fraud Bernard Madoff is to individual investors, AIG is to the global financial community.

As with the phony reinsurance contracts that AIG and other insurers wrote for decades, when AIG wrote hundreds of billions of dollars in CDS contracts, neither AIG nor the counterparties believed that the CDS would ever be paid. Indeed, one source with personal knowledge of the matter suggests that there may be emails and actual side letters between AIG and its counterparties that could prove conclusively that AIG never intended to pay out on any of its CDS contracts.

Here are some of the insurance/finance stories I’m tracking this morning:

From the Wall Street Journal we find Credit Suisse analyst Thomas Gallagher opinied the Hartford may need to post collateral on about $400 million of credit-default swaps it has written if it suffers further downgrades to its ratings. Moody’s downgraded the Hartford to one notch above junk status Monday. Predictably the CEO and architect of the Hartford plunge into toxic paper Ramani Ayer remains in firm denial:

Hartford’s capital cushion is threatened by weakened earnings, losses in the company’s investment portfolio and its exposure to variable annuity products in the U.S. and Japan, the ratings agency said.

Hartford Chief Executive Ramani Ayer said in a statement late Monday that he disagrees with the Moody’s ratings actions. “The Hartford remains well capitalized to meet our policyholder obligations,” he added.

In its 2008 annual filing with the Securities and Exchange Commission, Hartford said ratings downgrades could trigger collateral calls on its derivatives, and limit its ability to purchase additional derivatives. As of now, the downgrades aren’t severe enough to cause such problems.

But another downgrade is possible, according to Moody’s, if the company suffers certain additional losses in its investment portfolio or certain capital declines.

I had a friend named Ramblin’ Ron
Who used to steal gamble and rob
He thought he was the smartest guy in town
But I found out last Monday
That Ron got locked up Sunday
They’ve got him in the jailhouse way down town
He’s in the jailhouse now he’s in the jailhouse now
I told him once or twice quit playin’ cards and shootin’ dice
He’s in the jailhouse now Continue reading “Oh Insurer Where Art Thou Part 5: In the Jailhouse Now”

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